The Obama Administration’s promises of expanded coverage, keeping preferred doctors and saving money took another hit as Texas’ largest insurer in the Obamacare marketplace announced a 60 percent premium hike for 2017.
Blue Cross Blue Shield of Texas (BCBSTX) argues that the substantial rate hike is necessary to recoup the “magnitude of the losses” it has suffered in the individual market since Obamacare came into force in recent years, according to the Associated Press. The company lost $220 million in 2015 and $416 million in 2014 as a dangerous combination of unexpectedly high volumes of claims and payment shortfalls plagued the insurer’s books. The roughly 603,000 policyholders can expect to see increases between 57.3 and 60 percent for individual plans.
As the only insurer in the state to offer coverage in all counties, rural Texans are facing a dual threat. One BCBSTX agent told Breitbart Texas that customers will continue to see challenges in obtaining preferential treatment at a price that does not bust their personal budgets. In 2015, the company switched all individual policyholders with Preferred Provider Organization (PPO) plans to Health Maintenance Organization (HMO) accounts in an effort to wrangle new costs under the Obamacare regime. As Breitbart Texas previously reported, HMOs lock customers into networks, leaving them reliant on referrals to see a specialist. Such plans are less appealing for physicians and many have opted out. In some cases, a rural Texan will have no other choice than to buy a BCBSTX policy and risk shortages in physician choice at the same time.
A local agent also expressed concern for those who make too much money under Obamacare rules to qualify for premium subsidies amid market spikes, yet will see household budgets broken to remain compliant with the law.
“An individual making more than $47,000 a year will have to juggle a higher premium while covering housing, food and probably a student loan payment,” one BCBSTX agent said under condition of anonymity. “A large number of policyholders will probably drop coverage and play the emergency room game, bringing us back to square one.”
A healthy, single millennial living in Houston after college that does not smoke currently pays between $2,333 dollars and $4,342 on annual health insurance premiums, based on coverage levels. Their deductible ranges from $2,750 to $6,750. Under the 2017 rate hike, the cheapest annual premium will be roughly $3,732 in Texas.
Individuals earning more than $47,080 and families of four grossing $97,000 still cannot expect any federal assistance as insurance costs rise.
“We could be seeing a shift in Texas where insurance becomes a discretionary expense,” the agent told Breitbart Texas.
Yet another sign of income troubles for BCBSTX came in May as the company announced it would no longer accept credit cards as a form of payment for monthly premiums. Bank drafts, money orders and debit cards must now be used after June 1.
It remains to be seen how expected rate hikes will affect public opinion on how to curb costs and improve coverage. Breitbart Texas recently reported that a growing majority of Texans wish to see Medicaid expanded in the state despite longstanding resistance from Republican lawmakers. Sixty-three percent now support the idea of following states like Ohio, which determine eligibility based solely on income levels. Under an expansion, individuals earning less than $16,394 and families of four grossing $33,534 or less would automatically qualify.
The Obama Administration scoffed at emerging concerns over the rate hike in Texas, telling that AP that “Consumers will have the final word when they vote with their feet during open enrollment.” Barring a major market shift, Texans living in more rural counties will have only one option in that regard.
Logan Churchwell is a founding member of the Breitbart Texas team. You can follow him on Twitter @LCChurchwell.